A Mobile POS (mPOS) Must Provide Merchants What Square & PayPal Doesn’t

ISO & Agent Guest Column              

Square has soared up to over 5 billion dollars per year in payment card transactions, a phenomenal figure for sure and PayPal has claimed 2000+ signups per day after their recent launch into the retail brick & mortar marketplace.

The main reason for the huge dollar volume being processed by Square is that it was developed for P2P or person-to-person payments and it works without requiring a traditional merchant account.

PayPal accomplished its sudden deployment and recently successful campaign to sign up merchants by having an established infrastructure it developed via its relationship with its parent company, eBay Inc.

Both companies fulfill a need however they are not designed for real businesses that require point-of-sale features that integrate with QuickBooks, SAP, Oracle, Sage and others. Merchants also need technology that delivers reports, controls inventory and monitors transactions.

But the foremost concern for a business is cost. A merchant is in business to make money and that business is their livelihood, that’s how they feed their family. Therefore any business with significant sales volume finds the payment processing cost to be critical.

Meanwhile, the basic cost for Square is 2.75%, and PayPal basic is 2.70%.

So let’s do the math. A merchant with $25,000 per month in transactions that uses Square to swipe card-present transactions pays around $687.50. That’s because keyed-in transactions cost 3.5% plus 15 cents per transaction. So, $50,000 would cost $1,375, and $100,000 in sales would cost around $2,750. Any keyed-in transaction of more $1,000 is held for 30 days.

PayPal would be about $2,700, plus additional monthly fees in three versions. A virtual terminal is available at 3.1% plus 30 cents per transaction.

PayPal can also link to an existing merchant account for a $179 set-up fee and $19.95 per month with 500 free transactions. 

A merchant processing $100,000 or more can save $700-$750 per month when charged a more reasonable 1.99%, which saves around $9,000 to $10,000 each year. That’s a lot of money; money merchants can redirect to inventory, marketing or even a vacation.

If you search long enough, you’ll find a PayPal tiered volume discount rate structure you can apply for starting at 2.9% + 30 cents up to $3000 per month, 2.5% plus 30 cents, $3000 to $10,000 per month, $10,000 plus 2.2% plus 30 cents.

Not having to qualify for a typical merchant account means more risk, which is why the pricing is higher, and there are parameters such as volume limitations and payment holds and much more when using Square or PayPal.

But Square and PayPal aside, today’s merchant must be able to offer a compelling and differentiated service experience in their stores.

Mobile POS (mPOS) solutions such as the enterprise edition of ABC Mobile Pay, http://www.abcprocessing.com/ supports a variety of sales floor functions, including inventory lookup and management, customer data acquisition, and line busting, which means sales associates check out customers on handheld devices to shorten the lines at the registers. It also facilitates remote printing and works with legacy system printers or wireless printers.

Peripherals, such as bar-code scanners, printers, cash drawers, keyboards, mobile card readers, audio and video streaming devices, and accessories for Apple and Android devices, are sophisticated and operate intuitively. The devices offer a new option for in-store mobility, customer interaction and relationship development.

ABC Mobile Pay is a cloud-based POS solution and can handle sales in the store and online. Because it shares the inventory database, all of the sales personnel have access to the same information and the database tracks sales and transactions instantaneously for inventory control, management and accounting.

Freed up by the mobile devices, associates may roam the store for line busting inside or outside and can offer parking lot or drive-through checkout. Servers and sales associates may accept payments at the table in a restaurant or at the door in a store or on a delivery.

Mobile POS equipment should connect to the point-of-sale system based in the cloud. The mobile device is simply an extension of the POS, communicating with the central database regarding transactions and inventories. The payment should seamlessly integrate with the order the customer has placed, whether it’s online, in the restaurant or within the retailer’s four brick walls.

Merchants can accept payments at any time while developing deeper customer relationships. For instance merchants can capture the customer’s email address to send a receipt and the customer can opt-in to join a loyalty program or receive a newsletter. There are more things that merchants can do with the customer to provide a unique and satisfying buying experience that they couldn’t do before.

A busy merchant operating a thriving business now has a viable mobile POS (mPOS) payment option to Square and PayPal. By utilizing an enterprise level mobile POS solution such as the ABC Mobile Pay application on an iPhone, iPod, iPad or other mobile device merchants can increase sales and develop loyal relationships cementing emotional bonds that will have customers raving and spreading the good word about their favorite tech savvy merchant. 

Rick Berry is CEO of ABC Mobile Pay, a Los Angeles, CA-based provider. Reach at rick@abcmobilepay.com - 661-259-2185 – http://www.abcmobilepay.com

Apple Taking Small Bites Of Mobile Payment

Year after year, Apple fans have expected the company to make a splash with an iPhone-based mobile-payment system. And year after year, Apple has let them down, but a lot has been going on beneath the surface.

Many mobile-payment systems, including Google Inc.’s, use Near Field Communication technology as the starting point. To use Google Wallet at the point of sale, a consumer must have one of the few NFC-equipped smartphones running its Android software. Similarly, a merchant must have a terminal with the proper hardware to read the chip.

For Apple, however, NFC is not the key ingredient. If it becomes widespread, NFC simply will be the icing on a cake that Apple Inc. has been baking–and will still be baking–for a very long time. “Right now, Apple devices are not NFC- equipped, but they are a more flexible environment from a software perspective than traditional” point-of-sale terminals, says Rick Oglesby, a senior analyst at Aite Group LLC.

Google’s Android is the leader in smart- phones, according to Gartner Inc., but the Android product line is too fragmented to sustain the sort of payment ecosystem Apple is building. Android devices come in hundreds of shapes and sizes along with operating systems that carriers often tweak according to their whims.

Apple’s i-devices, by contrast, are not customized for different carriers and have fewer hardware variations (Apple typically removes older iterations of its hardware from stores whenever it launches a new version). That allows for a uniform experience across the entire product line and a more practical foundation for a payment system, experts say. Apple did not respond to inquiries made by phone and email. 

Apple retail stores in Paris and London are using a device from Ingenico SA that slips over iPhone and iPod Touch devices to accept chip-and-PIN transactions and for full access to the iTunes app store, says Svy Nekrasas, vice president of marketing for the French terminal maker. 

“Apple is definitely a market leader, and we have nothing in the pipeline in terms of integrating other devices to this form of payment,” Nekrasas says. Ingenico is also the hardware provider for a test of PayPal’s wallet in Home Depot stores using traditional point of sale devices.

Most payment systems built around Apple’s devices still rely on plastic cards. Square Inc. set the tone for mobile payment acceptance with a freely distributed reader that lets small merchants accept transactions through the iPad and iPhone. Square designed its reader for small merchants, but other hardware makers are bringing Apple’s devices into established retailers.